Italy’s rebar prices may have hit bottom

According to the latest survey of the Italian rebar market by SteelOrbis, the downtrend in the market may have come to an end. Average prices of 14-26 mm rebar in the Italian domestic market at €495/mt ($618/mt) ex-works have not changed since last week, though top producers may offer some small discounts for larger volume orders. After rapid decreases in the previous one-month period, rebar prices in Italy have fallen only by about €5/mt ($6/mt) in the past three weeks.
 
Market operators contacted by SteelOrbis state that the decreases in rebar prices, arising from the weakness of Italian construction activity, may have come to an end. The drop recorded in scrap prices in June, which was much steeper than the decrease in long steel prices, has provided steelmakers with sufficient profit margins to continue their production activity in the medium term. The most optimistic forecasts suggest that during July and in the few working days of August preceding the summer holidays transaction activity in the Italian rebar market may gain momentum and also average prices may increase slightly. Although this would not be a proper uptrend, with support coming from international markets Italian market sentiment is now improving compared to the last two months.
 
On the export side, during the past month ex-Italy rebar offers have decreased from €510/mt ($637/mt) FOB to €490-495/mt ($612-618/mt) FOB. Export market activity has ground to a halt due to the approach of Ramadan and also due to problems related to credit allocation for Algerian buyers. Besides, Algerian buyers have canceled some orders booked with Italian rebar producers, due to credit facility issues. Accordingly, traders are trying to sell these unshipped rebar batches lying in warehouses at a loss. It is reported that these traders have collected a few orders from the Middle East and North Africa (MENA) region, where long steel inventories are already high.
 
€1 = $1.249